The Pickens sentinel. [volume] (Pickens, S.C.) 1871-1903, 1887-12-15
THE WANING "s1AGIC CITy ;,
ho, omh""rd WI Trend of tho Inflated Ar,
".owhs'.Depression La uirn,,n,.,,''
IA Sad Collapse In proan.ot ii'"n


III downward Trend of tho Tna
I. "a .o"hs'-Depression La nirmIn.,'.
Q, '" collapse I'm Prospect.
m Strom the New York Herald,
ne new South. 1t is now nearl,,
q year SINCE the boom in that soot;n
n minated. The whole country on 6os t Gu
l. oneI Ine with the fairy tale of the Sonth
o so,,,N ""nonin9' OF her wonderful mineral -
s s''';, sUmtoes, OF the new towns and c;t;'
q sptihglng up, of fortunes made IN oiSi' SU
y y and all the rest of it. >'o III ia
W" tnat the fermentation bas on,
sloed' 1t Is worth while TO hlou, LOS "sr 'ut t,l
iTotn VIC and glance at what is nnGa, a. u, :.
" mVI' ~ Ine situation is seriously strained
In inc now manufacturing cities evarU
pouy has been doing little more otIrS +h:S,
was SAFE and, consequently, is now ' h"r
rowing Money commands s;xtoo, ~ -
ei9hteen per cent, and even moro on' ~
INC lowest rate at the banks on ohoo,''to "ti'
y, ~ saie security is one per cent q nromtI,
INC Doom has subsided, but the ri. nennI,
a1e trying to sustain real estate on th'
aossnTfdly high level to which Is wos ;rtn3 tea;
,.a. III the period of crazy speculation. 'II II
iests upon n vast trestle work of ;,tor
related credits. u 1a1er'
u, LANDOWNERS, hotel keepers. soents
shoPkeepers, mechanics-tbe b1nhis, bLSI,
owner OF single lot not vet half MY
o4r ana tho land company with millions
1l capltal-aro all trying to talk m on1
3olo up values. The creditor docs @ nnt
GaIe 10 press the debtor, for if one brioI, JV
IL tne row Is toppled over Others mnnt ]
IhoVlta3ly rIy go, too, and no one couId toii
"Iefe the trouble would end. WILL
liver Everybody is hoping for anotbor
~ ooom.ioT a rising tide of specnIotion
~ "h1ch ne may float out of his 6ifIinui
con,;,, cleS, ne feels sure that this revival is
odgopsS Soons sa. put 1t RaHg RsndinG nGsiithtag "iao
rates paid amount to confscation. The |
borrowers are doomed.
The state of affairs in the new manu-
:acturing city of Birmingham, Ala, is
fairly representative. During the |
'boom" one year ago, the Elyton Land |
Company (Which founded the city !; sold |
no end of building lots at enormous
prices, taking one-fourth cash and notes
at one, two and three years respectively |
for the remaining three-fourths. The
one year notes have of late been falling
due from day to day, but the makers are
unable to pay.
The lots were sold for absurdlY high
prices-as high as 81, 500 per front foot
on the ragged outor edge of so-called
"business" streets. The twenty-five per
cent. cash payment in most instances
probably represents the full intrinsic
value of the property, or more than the
value, but most of the lots were bought
oHspeculation, and in many instances
lots, after sale by the company, have
passed through rev cra' hands at always
advancing prices; so that they are now
nominally owned by persons several re-
moves from the original buyers.
Now that the boom has died out and
there is no demand for lots, the last
buyers cannot sell except at a great sacri-
fee. But the lot owners and the COM
pany are alike interested in keeping
property up on its fictitious level. Cool
headed investors who visit the city are
repollcd by the prices asked, to the per-
manent injury of the town. True, the
city is ringing just now with the sounds
of hammer and trowel, but most of this
work is being done under contracts made
last spring or summer while the fever
WAS on. l could learn of few or no new
contracts being made.
The land company is now carrying"
those who bought its lots, and individu-
ais who sold real estate are doing the
same by their debtors. If the company
could seize the lots it could not sell
them, SO that the notes (Which bear in
terest, of course) are more valuable than
the "dirt," provided the drawers succeed
in pulling through, and if they do not,
the company can then recover the land
anyhow. From selfish motives the COM
pany must extend tho notes of delin-
quents and help them along-the con.
Germ must be kept agoing or be smashed.
With the passing of tho boom business
has fallen of and shopkeepers burdened
with frightfully high rents are in danger
of going to the wall. The company, il
may be noted, could not foreclose if il
would, for it has not O mortgage on the
lands sold. Instead of giving the buyer
deed and taking a mortgage for th'
balance Of the purchase money the com
pany gives simply bond that the titl
shall be vested in the holder when tin
last payment shall be made.
The ease with which these bonds coulC
be transferred was an clement in foster
ing the wild speculation. TO wipe on
the claims Of the holders of these, how
ever, would involve long and tediou
litigation. At Decatur and somo Othe
| nc" CluiCS Uu0J arc WlbCI bucJ SlVS I'll
buyers deeds and clap mortgages on tn
property for the balance of the purchas
money.
The Elyton Land Company passed il
dividend the other day, thus indirectl
confirming the correctness of the stat,
ments made above. Instead of payin
{ its cash dividend the company issue
e. script convertible into bonds. The SCRIP
represents, tho company says, $2,400
600 of good notes in its treasury, and {
= these cannot be disturbed, they al
: going to make an issue of bonds insteaC
In other words, instead # the usual cas-
dividend the stockholders ore offered
Y mortgage on their own property, an
this because the drawers of the notes al
probably "lying down."
It's tight squeeze. If money shoul
become easy and the iron trade shoul
n be prosperous, and there should be
, new speculation "boom" in reality, Bi
/ mingham will pull through.
il But if monetary stringency continue
d and speculation continues mOribund, al